LIBOR (London Interbank Offered Rate) is a benchmark that some of the world's leading banks charge each other for short-term loans.
In addition to setting rates for interbank loans, LIBOR is used to guide banks in setting rates for loans, mortgages and credit card debt. Thus, any fluctuation in the LIBOR rate will have great effects on the economy.
Unfortunately, banks can easily misreport their interest rates to control the LIBOR rate, and gain extra profits from the discrepancy.
In fact, in 2012, Barclays Bank was accused of reporting lower rates than they were being offered during 2005-2009, and its CEO Bob Diamond had to resign. Upon leaving, Diamond claimed that most other banks were doing the same thing, and that the Bank of England knew about it. No change to LIBOR has been made ever since.
An alternative to LIBOR is necessary!